Gulf aid bolsters Egyptian pound against the US dollar

The Egyptian pound edged up against the US dollar to EGP 6.99 as a result of the recently delivered $5bn in Gulf aid packages(AFP Photo)

The Egyptian pound edged up against the US dollar to EGP 6.99 as a result of the recently delivered $5bn in Gulf aid packages, the Central Bank of Egypt said on its official website.

Following the military ouster of former president Mohamed Morsi, a number of Arab countries announced new financial aid packages to Egypt, including $5bn from Saudi Arabia, $3bn from the United Arab Emirates and $4bn from Kuwait, in addition to a Bahraini aid package which is expected to be put forward soon.

Last week, the central bank confirmed it had received UAE’s and Saudi Arabia’s aid packages.

As for the black market, the American dollar has fallen to a record EGP 7.10 compared to 7.85 against the pound in April.

Mohamed El-Abyad, head of the Exchange Division at the Federation of Egyptian Chambers of Commerce, attributed this hike in the pound’s value to the recession of the market and people’s concerns over what may happen in the coming days.

“The aid injected from various Arab Gulf countries has also had a great impact on the price of the pound to the US dollar,” El-Abyad added.

In an attempt to curb a run on the pound, the central bank started hosting dollar auctions in December to halt the sale of foreign currency. The auctions are aimed at rationing the supply of dollars and giving priority to staple food imports.

The Egyptian pound lost over 15% of its value against the dollar during Morsi’s year in office, contributing to a 9.8% rise in the annual inflation rate this June, compared from 8.2% in May and 7.6% in March, the Central Agency for Public Mobilisation and Statistics reported. June’s inflation level is the highest since 2011, when levels registered 10.4% in July.